Press Release Details

For Immediate Release                                                                           Toronto Stock Exchange: BPF.UN

BOSTON PIZZA ROYALTIES INCOME FUND AND BOSTON PIZZA INTERNATIONAL INC. ANNOUNCE FIRST QUARTER RESULTS AND APRIL DISTRIBUTION TO UNITHOLDERS

 Earnings per unit before non-cash items rise 4.3% in the first quarter

VANCOUVER, BC, (May 11, 2010) - Boston Pizza Royalties Income Fund (the "Fund") and Boston Pizza International Inc. (“BPI”) each reported today financial results for the period from January 1, 2010 to March 31, 2010 (the “Period”). A copy of management’s discussion and analysis and financial statements of the Fund and BPI for the Period are available at www.sedar.com and www.bpincomefund.com. The Fund will host a conference call to discuss the results on May 11, 2010 at 8:30 a.m. Pacific Time (11:30 a.m. Eastern Time). The call can be accessed by dialling 1-800-319-4610 or 604-638-5340. A replay will be available until May 18, 2010 by dialling 1-800-319-6413 or 604-638-9010 and entering the pin code: 4452 followed by the # sign.

The Fund’s earnings before income taxes and dilution gains or losses per unit increased by 4.3% for the Period compared to the same period in 2009.  The Fund’s earnings before income taxes and dilution gains or losses for the Period were $4.8 million or $0.342 per unit compared to the first quarter of 2009 in which earnings before income taxes and dilution loss were $4.9 million or $0.328 per unit. Distributions declared for the Period were $3.3 million or $0.230 per unit, unchanged from the same period one year ago.  Despite the decrease in earnings for the Period, the Fund’s earnings before non-cash items including future income taxes and dilution gains or losses on a per unit basis increased for the Period compared to the same period in 2009 due to the lower number of units outstanding during the Period versus the same period one year ago as a result of the Fund’s acquisition and cancellation of units pursuant to normal course issuer bids. Distributions for the Period were funded entirely by cash flow from operations. No debt was incurred at any point during the Period to fund distributions.

Same store sales growth (“SSSG”), a key driver of yield growth for unitholders of the Fund, was negative 5.4% for the Period compared to positive 2.8% in the same period one year ago.  The decrease in SSSG for the Period was principally due to the strong comparable SSSG posted in January of 2009 as the result of a successful new national promotion which ran during that month with television marketing support. Prior to 2009, there had been no comparable national promotion or television advertising during this period. Franchise sales of restaurants in the royalty pool were $160.5 million for the Period, roughly unchanged from $160.7 million in the same period in 2009. Franchise sales results for the Period were positively impacted by the addition of 17 net new restaurants to the royalty pool on January 1, 2010, offset by the continued weaker economic conditions.

“Boston Pizza continued to feel the effects of the prevailing weaker economic conditions on franchise sales during the first quarter of 2010. However, our strategic marketing programs and overall focus on the guest experience in our restaurants will help us regain sales momentum as the economy recovers” said George Melville, Co-Chairman and Owner of Boston Pizza International Inc. “We are pleased that cash earnings per unit have increased despite the softer sales environment as a result of the Fund’s unit buyback programs.”   

The Trustees of the Fund announced a cash distribution to unitholders of 11.5 cents per unit for April 2010. The distribution will be payable to unitholders of record at the close of business on May 21, 2010 and will be paid on May 31, 2010.  The Fund periodically reviews distribution levels based on its policy of stable and sustainable distribution flow to unitholders.   

The Fund is a limited purpose, open-ended trust established under the laws of British Columbia to acquire indirectly certain trade-marks and trade names used by BPI in its Boston Pizza restaurants in Canada.  The trade-marks are licensed to BPI for 99 years beginning in 2002 for which BPI pays the Fund 4% of franchise revenues of royalty pooled restaurants.

HIGHLIGHTS

The following table sets out selected historical information and other data from the financial statements of the Fund and the Boston Pizza Royalties Limited Partnership (the “Partnership”), which should be read in conjunction with the attached consolidated financial statements of the Fund.

 
OUTLOOK

BPI’s management believes that the prevailing weaker economic conditions will persist in 2010 resulting in continued pressure on SSSG and franchise sales at Boston Pizza restaurants in Canada. However, Boston Pizza is well positioned to attract a wide variety of guests into the restaurant, sports bar and take-out/delivery parts of each location and offer a compelling value proposition to Canadians in these challenging economic times. BPI’s strategies to drive guest traffic and higher average cheque levels include a larger marketing budget versus the previous year, national and local store promotions and menu re-pricing as part of the new menu launched each year in June. In addition, BPI’s management anticipates that 15 to 25 restaurants will complete renovations in 2010. Renovated restaurants typically experience an incremental sales increase in the year following the re-opening.

BPI’s management anticipates that 10 to 15 new locations will open across Canada in 2010. Boston Pizza remains well positioned for future expansion and will continue to strengthen its position as the number one casual dining brand in Canada by pursuing further restaurant development opportunities across the country.

Under the Specified Investment Flow Through tax legislation, which was substantively enacted into law on June 12, 2007, the Fund will be subject to a tax at the prevailing corporate rate beginning on January 1, 2011. This tax will reduce net earnings and will affect cash distributions to unitholders by approximately the same amount. Monthly cash distributions to unitholders will be reclassified for tax purposes as eligible dividends and Canadian residents who hold their units in a non-tax deferred account may claim the dividend tax credit for eligible dividends, thereby reducing the after-tax impact of this legislative change. Since the announcement of this change in tax legislation, management and the trustees have monitored the changes in the income trust environment and capital markets and continue to review potential impacts on the Fund’s current strategies and the alternatives available to the Fund, consistent with protecting and enhancing unitholder value. No determination regarding a change to the current trust structure has been made by the Trustees at this time.

Certain information in this press release may constitute “forward-looking information” that involves known and unknown risks, uncertainties, future expectations and other factors which may cause the actual results, performance or achievements of the Fund, the Trust, the Partnership, Holdings LP, Boston Pizza Holdings GP Inc., BPGP, BPI, Boston Pizza Restaurants, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information.  When used in this press release, forward-looking information may include words such as “anticipate”, “estimate”, “may”, “will”, “expect”, “believe”, “plan” and other similar terminology. This information reflects current expectations regarding future events and operating performance and speaks only as of the date of this press release.

For a complete list of the risks associated with forward-looking information, please refer to the complete forward looking information disclaimer included in the Fund’s most recent management’s discussion and analysis available at www.sedar.com and www.bpincomefund.com.

The trustees of the Fund have approved the contents of this press release.

FOR FURTHER INFORMATION PLEASE CONTACT:

Boston Pizza Royalties Income Fund
Jordan Holm - Vice President of Investor Relations
Tel: 604-303-6083
investorrelations(at)bostonpizza.com
www.bpincomefund.com